Elon’s town manager presented no property tax increase, but a 10 percent water and sewer rate hike, when he presented the board of aldermen with his proposed budget this week.
An 11 percent increase recently suggested by contractor Willdan Financial Services following a rate study would’ve brought the soon-to-be monthly, rather than the traditionally bi-monthly, combined water and sewer bills of households using 4,000 gallons a month up by $7.39.
With the expected arrival of federal funds from the American Rescue Plan Act, town staff opted instead for a 10 percent increase in 2022, which town manager Richard Roedner told the newspaper would increase the average household’s combined bill by $6.72 monthly.
The rate change proposed by town staff this week is expected to bring in $500,000 annually and blunt the cost of incoming infrastructure projects, including the $2 million purchase of neighboring Gibsonville’s Travis Creek pump station. The two municipalities signed off on the upcoming sale of the facility in late 2019 as part of a deal to create an annexation line extending north of the towns’ limits. Under that agreement, Gibsonville will now pay $300,000 annually to Elon for Gibsonville’s residents to continue using the pump station.
Part of the increase also factors in an annual increase in water and sewer rates by the city of Burlington; a 1 percent increase has been proposed for the city in the coming year. Burlington supplies water and sewer services to Elon, as well as Gibsonville and Haw River.
Willdan’s representatives also told the board that continuing to increase its annual rates as per usual – around 2 to 3 percent each year – would sink the town into the red as incoming debt payments for capital projects deplete financial reserves. On that note, Willdan suggested 11 percent increases each year for the next three years, then nine percent, and five percent in 2026.
In his own presentation to the board this week, however, town manager Richard Roedner explained that with $3.5 million in incoming federal funds from the American Rescue Plan Act, signed into law in March, two future capital projects may be covered and not require the town to incur debt. One of those projects would be the replacement of East Haggard Avenue’s waterline with one capable of meeting the demand that town staff expects in the coming years. The construction of the waterline, and its accompanying cost of $3 million, is set to appear in 2023’s budget, the manager explained.
Under the American Rescue Plan, Roedner added, the expected arrival of the stimulus funds allowed staff to drop the proposed rate increase from 11 to 10 percent for 2022, with plans to lower it further in subsequent years.
Budget pencils in three new employees
Under this year’s proposed $15 million budget – up $2.7 million from the current budget, mostly due to the $2 million that the town plans to borrow for the pump station – Roedner worked in three new employees, two full-time and one part-time.
The full-time additions would be a maintenance technician, scheduled to arrive mid-year, for the parks and recreation department and an assistant planner for current town planner and assistant town manager Pam DeSoto, who acts now as the sole member of the planning department. The part-time position would serve in the front office of town hall, assisting in the finance department.
New town hall not included for 2022
Though the apparent need for a new, larger town hall has been discussed at board meetings for months and even in last year’s budget discussions, the item was put aside for the coming year. This as both the town’s administrative and police departments, both of which share the space at the corner of South Williamson and West Trollinger avenues, have said that the current building leaves little room for current employees, let alone new additions.
During his presentation of the budget this week, Roedner said that he’ has had discussions with property owners who may eventually be willing to rent or sell their land for a new town hall. The police department would be given the existing building.
Staff has brighter outlook for sales tax revenues this year
With far brighter expectations than this time last year, the town’s manager said that the town is anticipating $3.3 million in sales tax revenues, $300,000 under the state’s projection that was provided to town staff.
Even so, the town’s expected revenues is $600,000 higher than the $2.7 million it had planned for late last spring as the pandemic was beginning to grip the country. Ultimately, the real sales tax revenues surpassed even the state’s pre-pandemic $3 million forecast for the town, a similar story across the county.
The budget will go before the board of aldermen again in June for a public hearing on June 7 and a final vote the Tuesday after, June 15.